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Highlights
- Social media platforms function as information dashboards that generate a wealth of data.
- These can be analyzed using natural language processing and social network analysis to get insights on various topics.
- Digital social sensing using social platforms is an effective means to analyze and understand the interests and financial behavior of consumers.
- The derived insights enable to interpret factors behind a consumer’s financial decision-making.
- Enterprises can leverage these findings to identify business opportunities, improve consumer engagement, and develop better business strategies.
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Gain consumer insights through social analysis
User interaction analysis on social platforms can sharpen marketing strategies, product development, and customer engagement. Here’s how:
Over the past two decades, social media platforms have gained popularity worldwide across different age groups, becoming an integral part of our daily lives. These prominent networking and communication platforms have evolved into multi-functional channels or dashboards that cater to varied objectives and activities such as knowledge sharing, news dissemination, marketing and advertising, discussion forums, entertainment, and others.
These platforms received a renewed impetus during the COVID-19 pandemic when people were confined to their homes. Individuals began to interact and consume more information through these platforms—from e-learning, digital payments, videos or reels, business meetings, and even medical consultancy. Moreover, these mediums have given rise to a new set of celebrities called influencers—having a significant fan following—who promote certain ideas or advocate views on a particular subject as knowledge sharing.
Social media platforms provide a dashboard for an individual to share views or content through posts, inviting their network or followers to comment and engage in discussions. These information dashboards create a wealth of data that can be analyzed using techniques like natural language processing and social network analysis to get insights and patterns on various themes and topics.
Businesses can leverage these findings to help managers identify the attributes that drive consumer behavior and spending.
Behavioral finance key to understanding consumer psychology
While disposable income and financial status are essential determiners of consumer spending, preferences and behavioral traits of individuals are crucial to understanding financial activities.
Lately, financial literacy, particularly personal finance, has gained traction on social platforms. Influencers and entities engaged in this business share knowledge on how to manage expenses, generate additional sources of income, and how to beat inflation with various available investment instruments to create wealth. This has attracted the younger population, especially millennials—who are now earning and wanting to save, as well as looking for financial advice on social media platforms.
This age group is also becoming the largest consumer segment in the world, which has intrigued market players across industries to understand their financial behavior, financial attitude, financial literacy, peer influence, and exposure to social media.
Survey results have revealed that social media plays a strategic role in imparting financial literacy to millennials, giving them a platform to seek knowledge and advice on managing their finances. With surveys being limited, digital social sensing becomes an effective means to understand the interests and financial behavior of consumers.
Social sensing to understand consumer financial behavior
Social sensing uses a social platform—where individuals with common interests actively engage in discussions—to understand the psychology and behavior of consumers.
Social media interactions generate volumes of data that can be interpreted using natural language processing and social network analysis that helps extract insights from the topics of discussion and user interaction patterns. It also helps map influential users and their network of influence. Additionally, certain computing tools help characterize the social behavior of users to measure sentiments, emotions, and tone from the conversations.
Social platforms that facilitate question-answer forums for knowledge sharing usually weigh high on user authenticity due to relative anonymity, given their genuine interest with queries, compared to networking sites.
Consider using a dataset captured from a social platform where a community or group of users discuss personal finance. Using the proposed techniques and tools, one can fetch details about their financial needs and aspirations, estimate the level of financial awareness, and identify groups or individuals having similar interests and how trust is built among their networks.
Stock investments, savings, credit cards, complaints related to banking operations, loans, annual tax, insurance, family related finances, etc., emerge as some of the prominent topics of discussion based on a sample data analyzed. These can be mapped to emotion-based attributes like optimism, affection, joy, pain, violence, suffering, weakness, fear, etc., to understand the psychology and the need of platform users. These insights enable us to interpret factors behind a consumer’s financial decision-making.
In addition to demographic information, insights into the time-period can be obtained, as to when a certain topic sees a spike in discussion. For instance, conversations related to tax and tax-saving options gain momentum in the months ending the financial year, say January to March.
Get the competitive edge
Social sensing can prove beneficial for businesses in detecting early trends and gaps when addressing customer needs.
Overall, social sensing enables rare insights that are beyond the scope of surveys. Higher user engagement of a post indicates that invisible users benefit from the content or discussion, the most popular post points out what the consumers want.
Evaluating conversations from information dashboards helps spot buying triggers, demographic information, consumer preferences, pain points, and product innovation. It also gives perspective on a product’s comparative analysis when users discuss the pros and cons with the competition. These attributes help identify business opportunities, improve consumer engagement, and develop better business strategies.
The approach can be extended to various domains including banking and insurance to understand the consumers better and know what influences their choices. The suggested methodology will offer enterprises the first-mover advantage by identifying trends and providing valuable insights.
